After making Aadhaar mandatory for filing of income tax returns, for those who have an Aadhaar, the government has now made it mandatory to link Aadhaar with bank accounts. In a notification dated 1 June, the Ministry of Finance made changes to the Prevention of Money-laundering (Maintenance of Records) Rules, 2005, which you can read here.
Most importantly, the new rules state that all existing bank account holders have to link their bank accounts to their Aadhaar (with a few exceptions). So, all regular bank account holders—and in case of businesses, trusts or joint accounts, those having power of attorney to transact—have to submit Aadhaar details to their respective banks.
Accounts that existed before 1 June, have to be linked before 31 December 2017. In case the account holder fails to do so, her access to the account will be blocked, and will be granted only after Aadhaar, or proof of enrolment in Aadhaar, have been submitted.
An account opened after 1 June would have 6 months to be linked to Aadhaar, failing which, access to the account would be blocked.
In case your address in the Aadhaar database is different from your current address, you have to submit another officially valid document as a proof of address, such as: voter ID, passport, ration card, and utility bills.
Linking an account with Aadhaar
Most banks allow multiple ways to link the account, over net banking, mobile banking, ATM, SMS or even by visiting a bank branch.
If you are using internet banking, you will find the Aadhaar seeding link in the accounts or services section of the banking website. You have to select the account number to be linked, enter the Aadhaar number, and then confirm the details. Note that you will have to repeat the procedure for every account if you have more than one bank account linked to a single login ID.
After you submit the details, the bank will take 3-4 working days to verify the details and complete the link.
Some banks like HDFC Bank Ltd are also allowing the linkage over phone. For this, just give a missed call to a designated number and you will get an IVRS call immediately, which will guide you through the process. With State Bank of India, you can do it by sending an SMS to a number.
Once your details are submitted to the bank, it will conduct an eKYC (or Know Your Customer) authentication through the Unique Identification Authority of India.
Those wanting to open a ‘small’ or no-frill account, do not need to submit an Aadhaar number. They can open such an account only on the basis of self-declaration.
A small account is one that is intended for poorer sections of society, and can be opened by any individual who is above 18 years of age and does not have any valid KYC document.
However, due to the relaxed KYC norms, such accounts come with many restrictions such as, the account cannot have more than Rs50,000 in deposits. This account can be converted to a regular savings account by submitting KYC documents.
Of course, these requirement—of seeding Aadhaar with bank account—are only for those eligible for Aadhaar.